Record freeze in U.S. extending wheat crop damage

The coldest start ever to the wheat-growing season in Kansas and freezing weather across the southern Great Plains are compounding damage to U.S. crops already hurt by the worst drought since the 1930s.

“I’m going to assume 75% of my wheat froze” when temperatures dropped as low as 13 degrees Fahrenheit (minus 11 Celsius) on April 10, said Gary Millershaski, who has been farming in southwestern Kansas for three decades and this year planted 2,800 acres of hard, red winter wheat on his land near Garden City, Kansas. “It looks like someone sprayed a defoliant on it.”

Farmers in the U.S., the world’s biggest exporter, probably will abandon 25% of their hard, red winter wheat, the most common variety grown, according to the average of 11 analyst estimates compiled by Bloomberg. That would be the most since a drought in 2006. Societe Generale expects U.S. output will drop 27%, sparking a 15% rally in Kansas City wheat futures to $8.50 a bushel by the fourth quarter.

Wheat sown from September to November went dormant over the winter as drought left crops in the worst condition since at least 1985. Growth resumed in March, and temperatures this month in Kansas, the largest U.S. grower, were the lowest in more than a century for areas that produced about half of the state’s harvest last year. Global supplies will drop to the smallest in four years as production declines from Argentina to Russia to Australia, the U.S. government estimates.

U.S. Varieties

Futures rose 1.4% to $7.3725 this month on the Kansas City Board of Trade after touching a nine-month low of $7.045 on April 1. The Standard & Poor’s GSCI Agriculture Index of eight commodities dropped 2.7% in April, and the MSCI All-Country World Index of equities slid 0.5%. Treasuries returned 0.9%, a Bank of America Corp. index shows.

Production of winter wheat, which accounts for 72% of all U.S. varieties grown, will drop 3.9% to 1.581 billion bushels (43 million metric tons), Informa Economics Inc., a Memphis, Tennessee-based research company, said on April 19. Of the total, the hard, red variety will decline to 850 million bushels from 1 billion. The U.S. Department of Agriculture will make its first estimate on May 10 based on a survey of farmers.

Mean temperatures across four of nine crop districts in Kansas in the first 18 days of April were the lowest since record-keeping started in 1895, said Mary Knapp, the state climatologist. The cold snap came as analysts, traders, farmers and buyers prepared for the Wheat Quality Council’s annual three-day tour of Kansas fields starting April 30. The group will issue a forecast for the harvest, which starts in June.